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Downsizing the Family home (revised April 27/2006)

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This is not tricky, here goes......

Two columns in the data entry grid come into play, the 'death benefit' column and 'nontaxable deposit' column.

The first step is to create the base data... namely enter the value of the home and what rate you think it's value will grow at. Let's say the home was $200K and you expect it to grow at 2% per year.

1. Click on first year's (top) cell of the 'death benefit column'. Enter the 200K current value of the house. The program will ask 'do you wish to copy all the way down"? Answer "yes". It will now ask for an index value. Enter .02. The house value will copy down the column.

2. Now, examine that 'death benefits column' at the point in time where you expect to downsize it. If you have chosen to index, then the 200K will have grown.

3. Now estimate the amount you expect to realize by downsizing. Let's say it was $100K. In other words you sell your house, buy a condo and pocket $100K.

4. Put $100K in the "nontaxable deposit" column. (one time single entry in the year of sale)

5. Click back on the 'death benefit' column, but in the next year. An amount is displayed. Let's say it came up as 234567. Reduce it by $100K... in other words make it 134567. Answer "yes" and .02 to the copy down and indexed prompts and there you have it!

6. Finally, click on the very top cell (the heading) in the death benefits column (there are now two such columns... scroll right for the second). Enter the string "Family Home".

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